RTTNews - The euro surrendered early gains versus the lower-yielding majors Tuesday as weaker global stocks reduced risk appetite. Meanwhile, the euro continued an up trend against the pound.
The common currency had reached near-term highs against the dollar and yen before heading lower in the mid-morning in New York. The euro had slipped to its lowest mark in about two weeks against both the U.S. and Japanese currencies yesterday before a late-day recovery.
In economic news on Tuesday, the Federal Ministry of Economics and Technology said German factory orders recorded a monthly growth of 4.4% in May, much larger than the expected increase of 0.5% and April's 0.1% rise.
Also in the Eurozone, EU finance ministers said at their monthly meeting on Tuesday that Lithuania, Romania and Hungary need to reduce their budget deficits to below 3% of gross domestic product by 2011. Poland and Latvia should cut their deficit to target level by 2012.
The euro dropped back below 1.4000 against the dollar after earlier hitting a five-day high of 1.4039. The European currency reached as low as 1.3881 yesterday.
The euro slipped off a daily high of 133.20 reached in mid-morning trading versus the yen. The pair moved near 132.25 in the early afternoon after touching as low as 131.72 yesterday.
Tuesday, a report by Japan's Ministry of Finance said the official reserve assets totaled US$1.019 trillion at the end of June, representing a decline of US$4.84 billion from May.
The common currency climbed to 0.8641 against the pound, its best level since early June. The euro has been trending higher for more than two weeks against its UK rival, recovering a small portion of a three-month slide.
In the UK, manufacturing production fell 0.5% month-on-month in May, data released by the Office for National Statistics showed Tuesday, defying expectations for a 0.2% growth. Meanwhile, the statistical agency revised April's figures to show a stagnation from 0.2% growth originally reported. On an annual basis, manufacturing output fell 12.7%.
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